NZD/USD loses traction above the 0.6100 mark ahead of US GDP data

The NZD/USD pair loses ground during the early Asian session on Thursday. The pair has retreated from the weekly highs of 0.6149 and hovered around 0.6110. The downside of the pair might be limited, backed by news of further stimulus in China by the PBoC. Investors will take cues from the Q4 flash US GDP growth numbers, weekly Initial Claims, and Durable Goods Orders, due on Thursday.

The US Composite PMI for January beat expectations, coming in at 52.3 versus 50.9 prior. The Services PMI rose to 52.9 from 51.4 in the previous reading, better than the expectation of 51.0. The Manufacturing PMI improved to 50.3 in January from 47.9 in December, marking the first time it has been above 50 in three months.

On the Kiwi front, the New Zealand Consumer Price Index (CPI) eased from 5.6% to 4.7% YoY in Q4, in line with expectations. The Core CPI, excluding food, fuel, and energy fell to 4.1% YoY from the previous reading of 5.2%. New Zealand’s inflation slowed in the final three months of 2023, though not enough to prompt the Reserve Bank of New Zealand (RBNZ) to seriously consider an interest rate cut anytime soon.

Late Wednesday, the People's Bank of China (PBoC) announced a deep cut to bank reserves in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a faltering stock market and fragile economy. The development surrounding more stimulus measures from China might lift the China-proxy New Zealand Dollar (NZD).

Later on Thursday, the flash Gross Domestic Product (GDP) Annualized for Q4 will be due, which is estimated to expand by 2.0%. Also, the weekly Initial Jobless Claims and Durable Goods Orders will be released on Thursday.